The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
American Eagle has deployed a web-based buying system that streamlines the purchase order process and lets buyers focus on what they do best—finding fashion material.
Selling apparel fashions to teens and young adults takes a lot of both art and science--the art in knowing what fashions will sell and the science of getting those fashions in front of shoppers while they`re still interested. The effort puts time constraints on retailers like American Eagle Outfitters Inc., which tries to delay final buying decisions as long as possible to get the right mix of fashion treatments for its private label apparel. "We really push the envelope in terms of each product execution," says Dave Repp, director of supply chain technologies.
But the system can put pressure on the retailer`s merchandise buyers, who must find the right goods while taking the time- consuming steps of preparing purchase orders. So American Eagle has deployed a web-based buying system that streamlines the purchase order process and lets buyers focus on what they do best--finding fashion material. "We`re making it so that buyers can focus on what they`re passionate about," Repp says.
American Eagle has deployed TradeStone Inc.`s web-based Unified Buying Engine, which operates on the retailer`s corporate intranet and extranet for integrating with internal departments as well as with suppliers. The tool integrates information, including design, merchandising and production plans, and presents it in real-time on a web screen, giving buyers the information they need to quickly draw up purchase orders.
"Before, it would take days to create a P.O. by the time the buyer researched information and assured it was accurate," Repp says. Now, buyers can get purchase orders out to two or three times as many suppliers in less time than in the past, helping American Eagle get the best products, prices and delivery times, Repp says.
American Eagle expects the system to sharply reduce the time it takes from product design to store delivery. "We hope to cut three to four weeks out of our timeline," Repp says.
Shortening that timeline lets American Eagle make decisions closer to each selling season about particular fashion treatments and styles, helping it get products on shelves that are more likely to sell in larger numbers and produce higher profits, Repp says.
And by letting buyers focus on what they do best, the retailer expects to keep them around longer. "Improving the retention rate of buyers is the ultimate result in providing efficient technology," Repp says. "If we have great buying talent, we want to keep them here."